MYGA Annuity Strategies for Affluent Individuals
Jason Stolz CLTC, CRPC
MYGA Strategies for Affluent Individuals
High-net-worth and affluent individuals require more than generic financial advice. They expect tailored strategies that optimize tax efficiency, protect assets, and support legacy planning. One of the most overlooked yet powerful tools in this space is the Multi-Year Guaranteed Annuity (MYGA). With guaranteed interest, tax-deferred growth, and liquidity features, MYGAs can play a significant role in diversifying wealth management strategies for affluent clients.
At Diversified Insurance Brokers, we’ve worked with affluent families nationwide since 1980, helping them design strategies that protect wealth while creating predictable growth. Below are proven ways to use MYGAs effectively with affluent individuals, along with actionable examples, calculators, and guidance to strengthen your next client conversation.
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📊 View Current MYGA Rates1. Bond Replacement Strategy
Many affluent investors hold large allocations in municipal bonds, Treasuries, or CDs. While these offer safety, the yields often underperform inflation. A MYGA provides a simple yet compelling alternative:
- Comparable safety with guaranteed interest rates
- Potentially higher yields than many bonds or CDs
- No market volatility exposure
- Tax deferral for non-qualified assets, unlike taxable bonds
For example, replacing a $1,000,000 bond allocation earning a modest rate with a competitive MYGA can materially increase annual growth—without adding market risk. For affluent clients, this is not just a rate play; it’s about maximizing the efficiency of safe assets.
2. Liquidity & Estate Planning Integration
MYGAs also play an important role in estate planning and liquidity management. While some assume annuities tie up money, MYGAs often allow partial withdrawals and provide clear death benefit guarantees. This makes them a flexible tool for individuals who prioritize legacy planning. Key features include:
- Penalty-free withdrawals for liquidity flexibility
- Spousal continuation to protect surviving partners
- Guaranteed death benefits for wealth transfer
- Integration with beneficiary planning for seamless transfer
3. Tax Deferral Advantage
For clients in higher tax brackets, tax deferral is a significant benefit. Unlike bonds or CDs, MYGA earnings compound tax-deferred until withdrawn. This makes them especially attractive for non-qualified funds:
- Reposition taxable interest income into tax-deferred growth
- Improve after-tax yield on safe assets
- Flexibility in timing withdrawals for tax planning
Position MYGAs as a Wealth Strategy
We’ll help you compare side-by-side with bonds, CDs, and other fixed-income assets to illustrate the real advantage.
📅 Schedule a Consultation4. Coordinating with Retirement Income
MYGAs are not just accumulation tools—they also integrate with lifetime income strategies. Affluent retirees often balance annuity income with Social Security and pension income to create a stable foundation. By using MYGAs with guaranteed rates, clients can:
- Bridge gaps between retirement milestones
- Defer withdrawals for tax optimization
- Fund income annuities later with guaranteed growth
MYGAs vs. Bonds vs. CDs (Side-by-Side)
| Feature | MYGAs | Bonds | CDs |
|---|---|---|---|
| Principal Protection | Yes (carrier guarantees) | Depends on issuer/market | Yes (bank guarantees) |
| Rate Certainty | Fixed for multi-year term | Varies; price/yield fluctuate | Fixed for term |
| Market Volatility Exposure | None | Yes (price risk) | None |
| Tax Treatment (Non-Qualified) | Tax-deferred growth | Taxable annually (generally) | Taxable annually |
| Liquidity Options | Penalty-free withdrawal allowances; surrender schedules apply | Secondary market; may sell at loss | Early withdrawal penalties |
| Estate Planning Features | Spousal continuation, beneficiary designations, guaranteed death benefit | Depends on titling/estate docs | Payable to named beneficiaries |
| Use in Income Planning | Bridge to lifetime income | Coupon income, price risk | Interest income, limited features |
5. Positioning Against Market Risk
Even affluent investors can grow weary of market volatility. A MYGA provides a place to park assets without risk exposure while still earning competitive returns. For high-net-worth portfolios, allocating a portion into MYGAs can:
- Provide safe harbor in volatile times
- Support diversification across asset classes
- Ensure capital preservation during uncertainty
Why Work With Diversified Insurance Brokers?
Affluent clients expect their advisors to understand both the technical details and the big picture. Since 1980, Diversified Insurance Brokers has delivered customized solutions across annuities, life insurance, long-term care, disability, and estate planning. With access to 75+ carriers and a fiduciary approach, we provide strategies that protect and grow wealth with confidence.
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🖊️ Request an Annuity QuoteFAQs: MYGA Strategies
A MYGA (Multi-Year Guaranteed Annuity) is a fixed annuity with a guaranteed interest rate for a set term—typically 2–10 years—combining principal protection, growth, and tax deferral.
MYGAs often provide competitive guaranteed yields, no market volatility, and tax-deferred growth, which can improve after-tax results versus many taxable bonds or CDs.
Yes. Affluent clients use MYGAs to enhance safe yield, defer taxes on interest, diversify fixed income, and support estate and liquidity planning objectives.
Most MYGAs offer annual penalty-free withdrawal allowances (often up to 10%). Larger withdrawals can trigger surrender charges, so planning the term and access needs is important.
In non-qualified accounts, earnings grow tax-deferred and are generally taxed as ordinary income when withdrawn (interest out first). In IRAs/qualified plans, standard retirement account tax rules apply.
Yes. MYGAs can be funded via IRA contributions, IRA transfers, or employer plan rollovers. The tax deferral overlaps, but the guaranteed rate and principal protection remain valuable features.
Often, yes—via a 1035 exchange between like-kind contracts. This can preserve tax deferral while positioning assets into a MYGA’s guaranteed rate. Suitability and carrier rules apply.
MYGAs can bridge income gaps, fund future income annuities, or provide a reserve for delaying Social Security—helping create a coordinated, predictable retirement income plan.
At maturity, you can renew, transfer to another annuity, roll to an IRA, or withdraw funds (subject to contract provisions). We typically review rates and goals before the term ends.
Yes. MYGAs allow named beneficiaries, spousal continuation options, and predictable death benefit handling—useful for legacy and liquidity planning.
